TyroCity: Business Studies XI Notes

Factors to be considered while selecting office machines and furniture

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Factors to be considered while selecting office machines and furniture are listed below:

1. Need of machines: before selecting any machine its degree of need is to be checked thoroughly. The alternates available to the machine also should be analyzed

2. Cost: cost of machine is a very important factor to be considered before selecting any machine. The machine should be within the budget of an office

3. Operating cost: capital cost and operating cost should be taken into account. Similarly, maintenance cost, repair cost, and space required for the machine also should be analyzed

4. Durability: office machine should be original, durable and lost lasting. Office machines are very expensive and it is not possible to purchase new machine every year. Therefore, the machine to be purchased must be free from problem of frequent break down. This also saves in repair cost

5. Easy to operate and flexible: office machine should be easy to operate and flexible. There shouldn’t be need of any additional training and specialization for handling of office machine. Machine should be usable for numerous purposes too

6. Servicing: office machines require regular repair and maintenance. The spare parts of the machines should be easily available in the market. Likewise, the servicing facilities should be readily available.

7. Quality and speed: office machine should be of higher quality. It should be speedy in nature.

Factors to be considered for selecting office furniture

1. Cost: cost of furniture is a very important factor to be considered before selecting any machine. The furniture should be within the budget of an office.

2. Design: design of furniture relates with height and width, color, number of drawers, and so on. No matter what, furniture should support the space and must facilitate the works done.

3. Durability: office furniture should be made up of steel rather than wood because steel furniture is compatible and lost lasting. Office furniture can be expensive and it is not possible to purchase new furniture every year because it doesn’t even support the space. Therefore, the furniture to be purchased must be free from problem of breakage.

4. Multiple uses: furniture should be usable for numerous purposes in the office.

5. Uniform: furniture in the office must have uniform quality and cost. They must have lower cost of maintenance.

6. Safety: office furniture should be safe. Glass topped and sharp cornered furniture are relatively unsafe.

7. Saving space: choice of furniture also depends upon the space occupied by furniture. Such furniture should be selected which would occupy minimum office space. Bulky and space occupying furniture indirectly add office cost.

8. Comfort: office furniture should be comfortable. Comfortable furniture will result in increased efficiency of the employees

9. Portability: the furniture being portable can be easily shifted from one room to another, one building to another and form one location to another.

Business Studies XI

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Unit 1 and 2

Unit 1: Introduction to Business

Unit 2: Evolution of Business

Unit 3 Forms of Business Organizations

Sole trading concern

Partnership firm

Joint stock company

Cooperative organizations

Public enterprises

Multinational companies

Business support agencies in Nepal

Unit 4 to 8

Unit 4: Office Management

Unit 5: Filing and Index

Unit 6: Record Management

Unit 7: Office Machines and Furniture

Unit 8: Business Communication

Winding up of company

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Winding up of Joint Stock Company

Winding up of Joint Stock Company is the process of bringing the existence of the company to the end. It refers to the closure of business forever. In this time company being a legal person created by law can dissolve its own business in the following way:

1. By company registrar office

According to company act, registrar office may order winding up company under following condition:

If promoters of the company makes application showing reasons for failure to commence the business of company
If company is in default in submitting office return notice, information and facts to pay fine as required by the act

2. By voluntarily

In the following condition company can wind up;

Company has become insolvent with accordance with law on insolvency
Shareholders of company can wind up the company either by adopting special resolution in general meeting
If company is able to pay its debts and other liabilities in fault.
If directors of company have after due, company makes declaration in written form that the company is able to pay its debts or other liabilities in full.

Registration and renewal of partnership firm in Nepal

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Partnership concerns are registered under partnership act 2020.

Procedures of registration

Apply for registration.

Application form is needed to be filled up and apply for registration. The application must include the following things

Name of firm
Address of the firm
Objective of the firm
Name and address of partners and address of the partners
Type of partnership
Amount of capital invested by each partner
Method of sharing profit and loss
Duration of business.
Other particular things.: necessary documents, registration fees, copy of citizenship

2. Deposit registration fee

Registration fee should be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in application form. If the firm is commercial then recommendation letter from Nepal chamber of commerce is required.

Capital	Registration fee	Renewal fee	Registration fee
Up to 1,00,000	Rs 700	Rs 100	Rs 700
From 1,00,001 to 3,00,000	Rs 2100	Rs 125	Rs 2100
From 3,00,001 to 5,00,000	Rs 4100	Rs 150	Rs 4100
From 5,00,001 to 10,00,000	Rs 7600	Rs 200	Registration fee
Up to 10.00,001 to 50,00,000	Rs 10100	Rs 250	Rs 700
Above 50,00.000	Rs 15100	Rs 300	Rs 2100

3. Receiving the certificate of registration

Concerned department receive the application. Than an authorized officer will examine. It satisfied then the form is approved and “certificate of registration” is issued and then legal business can be operated.

Procedure of renewal

The entire registered firm should be renewed each year within 35 days of time period. He should fill application for renewal with renewal fee to the concerned department. This amount is dependent upon the capital invested.

Effect of non-registration and non renewal

If the partnership firm is operated without registration and renewal then it is considered illegal. It can’t get loan from any financial institution. This department will charge from rs 5 to rs 50 as fee. The effect of non-registration and non renewal is if he is not registered and renewed then fee is charged. If same crime is done for 3 times, additional rs 10 are to be paid. If it is committed gain then partnership firm is closed and no any concern can be established under any partners’ name.

Office machine : meaning and importance

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Office machine
The rapid increase in the industrial activities has increased office work to the highest level. The machines were invented to reduce monotony and increase the efficiency of works done. They help to save time and labor. In modern offices, business completely depends upon the office machine and equipment. It increases the level of operation, improves the performances, safeguards the files, and increases the accuracy. Purchase, repair and maintenance of office machines require big investment. It is the duty of office manager to select the right type of machine. If they don’t select it properly then the office work won’t be efficient and effective.

Importance of office machine

1. To save labor: properly designed office machine saves labor. It helps in saving labor cost. Machines work faster than men. Total wage bill can be reduced.

2. To save time: machines work faster than men. The office machine helps to save time. The speed of official work is increased with the help of machine. It helps in completion of work in a faster way. It increases efficiency and effectiveness of work.

3. To provide accuracy: office machines works accurately. It increases in accuracy in all types of works. It reduces the error, fatigue and helps in supervision

4. To reduce chance of fraud: there may be barrier inside the organization. Machines help to check for the accuracy and correct method of works done t also keeps systematic records of all employees. Thus, it helps in reducing the fraud

5. To retrieve monotony of work: some jobs are routine in nature. They are repetitive in nature. Repetitive works are monotonous. Office machine s help in retrieving the monotony of the employees

6. To improve quality of work: office machines help to maintain the neatness, accuracy and quality of work done.

7. To increase goodwill: when there is saving of labor and time and increment of accuracy of works done, then there are fewer chances of errors and fraud which improves the quality of work done and helps in satisfaction of customer and the employees. This helps in increasing the goodwill of the office

8. To lower operating cost: office machines reduce the operational cost. It helps to reduce the wage bill. It also helps in reducing the excessive filing cost.

Characteristics of Multinational Companies

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Characteristics of multinational companies are given below:

1. Productive organization: this organization produces various types of goods and services. It is supplies in many countries. It uses its own technology, patent right for manufacturing goods.

2. Worldwide: multinational companies operate in whole world. It extends its business worldwide. It establishes many branches in various companies. They extend their business in more than one country.

3. Ownership and control: ownership of company remains on both parent and host country. Parent company control, manage and help in the operation of all host countries. They have control in capital, high technology, and trade mark.

4. Transfer of technology: these multinational companies are establishes with hug capital and advanced technology. It also transfers the technology in the host countries that can be used for production.

5. Marketing superiority: it is large organization which has international name and fame. It has good network worldwide for distribution of goods.

6. High efficiency: these organizations operate their business with efficiency. They use advanced technology. They also involve keenly in research works. They used many trained person that helps in the production of quality goods.

Business environment : concept and components (internal and external)

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Business establishes, grows or operates and dies in environment. It exchanges resources in environment. It collects inputs i.e. Man money, materials, machines etc. And provides output i.e. Goods and services in the environment. Environment means surrounding. Business environment defines as a force that affects on organizational performance. It includes internal an eternal factors. It provides opportunities and threats.

1. Internal environment
It is defined as all the forces or conditions that are available within an environment that affects on organization and business. It is also known as controllable factors because business can control them. It includes

Employees:
Business hires employees. It is the major internal factor. It works inside the business. It can be controlled by the business. Employees differ in skill, knowledge, morality, and attitude and so on. When managers and employees have difference in goals and beliefs then conflict may arise. The task of management is to divide the work and assign the work to the suitable employee and handle the conflict.
Shareholders:
Management deals with many shareholders. Shareholders have the right of ownership, power of management and voting right. The actual management of organization is carried out by elected representative of shareholders jointly known as boar of directors. Boards of directors have the responsibility of overseeing the management of organization. It plays the major role in formation of objectives, policies, strategies of the organization as well as their implementation.
Organization structure:
It is located inside the organization. The arrangement of various facilities, pattern of relationships among the various department, responsibility, authority and communication is the organization structure. It also included specialization and span of control.
Organization culture:
The sets of values that help the members to understand what organization stand for how it does work, what it considers, cultural values of business forces of business and so on. It helps in direction of activities.

2. External environment (PEST)

All the forces and condition that cannot be controlled by the business is called external environment. It is also known as uncontrollable factors because business can’t control them. It is located outside the business. It affects on organizational performance.

It includes:

Economic environment:
It indicates the condition of economy in which business organization operates. It has continuous and great impact on business. It includes national income, production, inflation, savings, investment, price, government activities. Business person must have constant watch on this factor.
Political or legal environment
It is defined as rules and regulations determined by the government. Business must fulfill demand of government. There should be non violation of rules and regulation of government. Business should avoid unfair trade and should provide essential information to the government.
Social environment:
Business must have good environment where a business can be established neatly. Business also helps in employment opportunities generation. There should be socio-cultural understanding and application of anti pollution measures.

Technological environment:
It defines about the methods available for converting resources into product or services. It transforms inputs into output. Input means material, capital, man, machine. It affects on business. It helps to change the level of job, skill, and product and so on. There can be innovation, development of scientific techniques which encouraged mass production and distribution.

Types and means of business communication

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Types of communication on the basis of formality

Formal communication

Formal communication refers to interchange of information officially. The flow of communication is controlled and is a deliberate effort. This makes it possible for the information to reach the desired place without any hindrance, at a little cost and in a proper way. This is also known as ‘Through Proper Channel Communication.’ It can be both written and oral. Daily works are handled through oral communication, while the policy matters require written communication. This communication is adopted among those employees where formal relations have been established by the organization. The sender and the receiver have some sort of organizational relations. The communication has to pass through a definite channel while moving from one person to another. For example, to convey the feelings of a worker to the manager, the foreman’s help has to be sought. This channel is concerned with the authorized organizational messages only and the personal messages are out of its jurisdiction. This channel of communication is not established automatically but effort has to be made for its creation. It is decided keeping in view the objectives of the organization.

Informal communication

Informal communication refers to interchange of information unofficially. This communication is based on informal relations (like friendship, membership of the same club, the same place of birth, etc.) And, therefore, is free from all the organizational formalities. The exchange of informal messages usually takes place on the occasion of community meals, social occasions, parties, etc. On such occasions, the superiors gather such information from their subordinates as may be difficult to get through formal communication. Such communication includes comments, suggestions, etc. For example, a superior wants to complain against his subordinate to his higher officer and at the same time he is afraid of giving it in writing. This can be conveyed to the higher officer through informal communication, say during the course of a conversation. There is no definite channel of communication. This communication is born out of social relations who mean that it is beyond the restrictions of the organization. No superior-subordinate relationship figures therein. A more sociable superior can gather much information through this channel. Through this communication, information about the work and the individual can be collected. It moves in a zigzag manner.

Communication on the basis of direction of flow

1. Horizontal communication:
It is the process of lateral flow of information in order to coordinate work activities at the same level of management hierarchy. It helps in coordination of task, share information and minimize the conflict. In other words, it is the flow of information between the activities and to solve the organization problems, this can be shown by following figure.

2. Vertical communication:
It is the process of upward and downward flow of information in order to coordinate work activities at the different level of management hierarchy. It helps in task directives, share information about rules and regulations, responsibility, problem, achievement and suggestions and minimize the conflict between subordinates and superior. There are two types of vertical communication

Downward communication: It is the flow of information from top to bottom through formal lines of authority. Top-level management transmits the information to subordinates about objectives, policies, strategies and responsibility.

Upward communication: It is the flow of information from bottom to top in an organization. Middle and low level management transmits the information to superior about problems, suggestions Upward communication

3. Diagonal communication:
It is the flow information between the superior and subordinates who are neither in the same department nor at the same level. It violates the principle of chain of command and unity of command.
Diagonal communication

Means of communication

1. Oral communication
The method of exchanging information through spoken word is known as oral communication. The information is passed from one place to another place by speaking. It helps to save time and provide immediate response and feedback. In oral communication, human voice is used. There are many means of oral communication. Some of them are telephone, radio, television.

It is economical. It is quick and fast. It helps to save time. It is more effective in comparison to written communication. It helps to give immediate feedback or response. It is the best method of solving problems. Ti is flexible. Decisions also can be changed on the spot. But it is less reliable and not good for evidence. It cannot provide future reference. It is not suitable for long message. Sometimes, there is language problem. It is not so suitable if sender and receiver are in different places.

2. Written communication
The method of exchanging information by writing is called written communication. It is important when message is complicated, accuracy and authentic. It is reliable source. It helps in future reference. It can be shown as evidence in court. The means of written communication are letter, order, report etc. It is authentic. It can be provided as proof in court. It can provide future reference. It is suitable for long message. It is suitable if sender and receiver are in different places. It is not economical. It is not quick and fast. It is time-consuming. It is not so effective in comparison to oral communication. It doesn’t help to give immediate feedback or response. It doesn’t help to solve problems. It isn’t flexible. Decisions also can’t be changed on the spot.

Registration of Cooperative Organization in Nepal

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

A cooperative organization can carry out its functions only after its registration under the cooperative act 2048. For registration of cooperatives following procedures should be followed.

1. Preliminary meeting:
According to the cooperative act 2048 there should be at least 25 members to form a cooperative society. Preliminary meeting must be held before applying for the registration. The meeting is held in the presence of 25 members under 1 chairman among them. The following things should be discussed in the meeting:

Commencement of the business
The name and address of the society
The objectives of the society
The value of each share
Membership fee

2. Filing an application for registration
After preparing and passing proposed by laws and working schemes in the preliminary general meeting. In application should be submitted to the office of registrar, department of cooperatives, and government of Nepal

Following things are mentioned in the application form

Proposed name of society
Address
Objectives
Working areas
Liabilities
Total share capital
Total number of shares to be paid
Two copies of law of proposed society
Original copy of working scheme
Copies of citizen certificate
Application must be signed by chairman

3. Receiving the certificate of registration
After filing application for registration, certificate of registration is to be received. After applying application along with document, they are submitted at the registration office. Then the registrar checks all the documents. If the documents are satisfactory then registrar will issue certificate of registration. After receiving certificate of registration, the society can operate.

Legal provisions for dissolution of co-operative society

According to the cooperative act 2048 cooperative society can be dissolved under following circumstances

Two third majority of total number of society can take decisions of dissolution.
Registrar can dissolve it, if application with reasonable clause is received.
Registrar can dissolve it, if the society is found inactive and not operating for two years.
The registrar can dissolve it, if it is found operating against the law and objectives of it.

Concept of public enterprises

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Public enterprise is an organization which is owned, managed and controlled by the government. It is necessary for the active participation of government in individual and commercial level. It is financed and operated by the government. It provides service to the public. It provides goods and services to the public at reasonable price. It is guide by service motive but it can earn nominal profit. It helps in maintaining the state of ownership and operation of industrial, agricultural, financial and commercial undertaking. It is one autonomous body which is managed and owned by government and which provide goods/ services for public.

Merits and demerits of joint stock company

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Merits of joint stock company

Large capital:
A company can collect huge capital for the business through shares and debentures, public deposits, loans etc. Due to huge capital the company can conduct business on a large scale.

Limited liability:
Usually the liability of members of a company is limited to the extent of uncalled or unpaid shares held by them. Their personal property cannot be seized to meet the company’s liability beyond the above mentioned liability.

Continuity and stability:
Death, insolvency or insanity of any member of the company will not affect its life and existence. Men may come, and they may go but a company remains forever. It can be wound up under the provision of the act.

Professional management:
The Company appoints experienced, competent and expert to manage the business. Their services lead to managerial and administrative efficiency and accuracy.

Economies of scale:
A company operates on a high scale and so it enjoys economies in production, distribution, management and financing.

Bargaining power:
Compared to other forms of organization, a joint stock company is a strong power in buying as well as in selling of goods because of its large scale production.

Legal status:
Since the company is created by law, it has separate legal existence compared to its members. Therefore, the members cannot be personally held responsible for the acts of company and company cannot be held liable for the acts of the members.

Large membership:
The Company is owned by many members- maximum of 50 in the case of private limited company and unlimited number of member in the case of public limited company.

Transferability of shares:
Shares of Joint Stock Company, especially public companies, are freely transferable. A member who wants to sell his shares can easily do so in the stock market. This encourages the public and other to invest in shares.

Employment:
Joint Stock Company provides employment to many people directly and indirectly. This leads to higher national income for the country and higher living standard of living for the people.

Government revenue:
Joint Stock Companies provide revenue to the government in the form of taxes charged directly and indirectly.

Research and development:
Joint Stock Companies undertakes R&D continuously thus bringing about new and improved products which benefits people.

Economic development:
Because of Joint Stock Companies there is all round development of trade, commerce and industry. The society in general gains the benefit of the industrial development. Large capital, government revenue, economic development etc. are the advantages of Joint Stock Companies.

Demerits of Joint Stock Company

Difficult formation:
Formation of Joint Stock Company is an expensive and time-consuming process as a number of legal formalities have to be undertaken in order to register the company.

Lacks flexibility:
The working of a Joint Stock Company is less flexible s compared to other organizations. For very small thing they either have to follow a detailed procedure or obtain sanctions from various authorities. This results in lack of flexibility.

No business secrecy:
This form of organization lacks business secrecy because it is compulsory for the company to publish accounts and other records

Excessive government regulation:
The Company is a subject to excessive government control. It has to follow the numerous provision of the companies act. This makes working difficult.

Delay in decision:
The Joint Stock Company is completely not free to take all decisions and to implement the decisions. Due to excessive government control and democratic set up all decisions are taken in meetings and some decisions require shareholder’s approval. All this leads to delay in decisions.

Lack of contact with customer:
A company can’t be in a position to maintain intimate contacts with customers. It cannot be able enter to the requirements of each and every customer. Then there is no close personal touch which decreases the competitive strength of the business due to large scale operation.

Lack of contact with employees:
The top management may not have contact with their employees. This may cause friction and disputes amongst the management and the employees with may affect the worker’s and employee’s morale.

Conflict of interest:
Many persons are the owners of Joint Stock Company. There can be misunderstanding and jealousy amongst them and these cause problems in operation of business and profit making

Not suitable for all type of business:
This type of organization is not suitable for business where personalized services are required.

Exploitation of shareholders:
Sometimes the BOD may misappropriate the fund and mislead the shareholders by window dress report. The directors may even manipulate the trading on the stock exchange. Thus, shareholders can be exploited by corrupt directors.

Features of cooperative organization

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Features of cooperative organizations are as detailed below:

1. Voluntary association and open membership
It is voluntary association in which membership is open for all people with common interest. People can come together to satisfy the needs with common effort. In Nepal at least 25 members are required for establishment of cooperative organization.

2. Equal voting right
It is based on democratic principle. It is based on equality of status of all members. Decisions and other bills are passed on the basis of majority votes.

3. Democratic management
Management is always in democratic lines. All member of organization elect its managing committee. One man can give only one vote. Managing committee will then work for common benefit of all members.

4. Service motive
Its objective is to provide service to member. It’s not profit motive. Its aim is not to earn maximum profit as in all form of organization. Even though it can earn profit by extending their services to non members but they collectively work for service.

5. Legal existence
In Nepal, these types of organizations are established under cooperative act. There must be at least 25 members and they all must be guided through common objective

6. Cash transactions
In this type of organization transactions are done only through cash. There are no credit transactions. It eliminates bad debt too.

7. Disposal of surplus
It is service motive. Even though it can make surplus, the surplus amount is used for extending the surplus facility.

8. Education
The success of organization depends upon the education of its members. They should be constantly educated with objectives.

9. Liability
Liability of member is limited. It should use the word “ltd” after its name.

10. Government control
The organization must follow the rules and regulations of the government.